Florida Elder Law & Estate Planning Blog

10 Misconceptions About The Florida Durable Power of Attorney

The Florida Durable Property Power of Attorney (also known as the Durable Financial Power of Attorney) is a critically important document that belongs in your life planning toolbox.  The DPOA allows you (the “principal”) to give another person (your “agent”) the authority to handle your financial and business affairs if you cannot do so. The authorized person can then seamlessly step into your shoes to pay your bills, deal with your investments, file your taxes, deal with your banks, buy or sell property, etc.

The DPOA is a powerful document that you should discuss with your estate planning lawyer to ensure it serves your needs and does not create any unintended negative consequences. You should fully understand what this instrument can do and cannot do. In this post, we shine a light on several common misconceptions about the Durable Power of Attorney, and show you how to steer clear of mistakes.

Misconception 1: Your Florida Power of Attorney Is Effective Only When You Are Incapacitated


In Florida, a DPOA is valid only if it grants the agent immediate power. In other words, once you have signed it, your agent has the power to transact business on your behalf. This is why you must choose an agent you trust without question. In the wrong hands, a DPOA can do a lot of damage.

Unlike the immediate DPOA, a springing DPOA activates your agent’s powers only when you are actually incapacitated. Note that a springing DPOA is valid in Florida only if it was signed before October 1, 2011 (when the applicable law changed).


Misconception 2: Your Agent Always Has Very Broad Powers


Many Durable Power of Attorney pre-printed forms and internet forms include the language, I give my agent the power to do anything I would do, or some version of that phrase. That statement leads many people to conclude, incorrectly, that their agent has far broader powers than the agent actually does. Here’s the reality: If you do not mention a specific power in your document, Florida law assumes you deliberately omitted it, and your agent will not have that power.

As an example, let’s look at the power to make gifts. Our lawyers are often asked by adult children to help an incapacitated parent secure Medicaid nursing home benefits. Step one in these situations is for us to examine the parent’s DPOA. If the document does not empower the child to make gifts from the parent’s assets, there may be little that can be done to preserve the parent’s nest egg.

The authority to gift, as well as certain other powers such as the power to set up a trust or to change beneficiaries, are known as “superpowers.” If you want your agent to have these extensive powers, Florida law requires that you specifically list them in your durable power of attorney.  In addition, you must physically initial the sections of your document that relate to these so-called superpowers.


Misconception 3: Florida Has A Statutory DPOA Form


There is no one statutory DPOA form in Florida. However, the state sets certain legal standards for the execution, notarization and witnessing of the document. Your estate planning attorney will make sure your document fulfills all those standards. A DPOA that does not conform to these requirements is not valid.


Misconception 4: Your Financial Institutions Are Required To Honor Your Durable Power of Attorney


Even if your DPOA is legally valid under Florida law, financial institutions are not legally required to honor it. After all, permitting someone else to act on your behalf opens a bank up to significant liability if it makes a mistake. As a result, financial institutions tend to be very picky about powers of attorney. It is not uncommon for an agent to be turned away when presenting a DPOA to the bank. Needless to say, this is a source of great frustration for honest agents who find themselves prevented from performing necessary financial transactions for the principal.

There are a variety of reasons the financial institution may give your agent as justification for not honoring your DPOA. One common reason is that the document is “too old.” But just what “too old” means is subjective and varies from institution to institution; it could be one that was executed three years, five years, or ten years ago. For this reason, our attorneys always recommend that once we draft your DPOA, you submit it to your bank immediately and request that it be reviewed by the bank’s legal department. Do this in advance, so that you know your agent will be able to use the document if and when the time comes. If the bank gives the green light to your DPOA, get a written statement confirming that it will honor your DPOA. It is not unusual for a bank to also ask you to complete its own in-house DPOA form, even if it says it will honor yours.

If your financial institution refuses to honor your DPOA, by law it must furnish you with the reasons for rejection. If the reason is not legally valid, the institution could be held liable for any damages you incur, including attorney’s fees you incur if you sue to require the institution to honor the durable power of attorney – that is, if you even prevail. However, knowing the bank may be on the hook for damages is little solace for a frustrated agent prevented from conducting business on your behalf.


Misconception 5: Once Executed, Your Power of Attorney Is Good Forever


As noted above, financial institutions are wary of their possible liability if they allow an agent to transact business based on a too-old DPOA. That is just one of many reasons that you should review the document – and all your estate planning documents – every 3 to 5 years, or whenever a major change occurs in your life. We have had numerous consultations with people who tell us they already have a DPOA and have confidence in it. Then, when we examine the document, we find that their agent is a spouse who died, or a friend with dementia, and no backup agents are named!


Misconception 6: It Is Better To Name Co-Agents Rather Than Just One Agent


It all depends. While two heads can be better than one, that is not necessarily the case when it comes to your durable power of attorney. If you appoint co-agents, you can require them to act together, but what happens if they cannot agree? Another thorny problem: suppose you have two children and allow each one to act independent of the other. What happens if, say, one sells the parent’s house and the other is dead-set against it? And if  you are choosing just one agent from among all your children, could this be seen as favoritism and create anymosity among them?

As you can see, selecting your agent(s) is a sensitive issue. It can impact on how your affairs will be handled in the future, as well how your family members get along going forward. You should discuss your particular family situation and concerns with your estate planning attorney before you make your decision.


Misconception 7: Your Power of Attorney Is Useful Even After You Pass Away


Your DPOA has no value once you are gone. We had a situation recently with one man who, shortly after his mother’s funeral, presented her bank with her DPOA that named him as her agent. He requested that her bank account be closed and moved to a bank in another state, closer to where he lived. The bank told him, correctly, that the power of attorney no longer applied. Instead, the personal representative for her estate would have to contact them and provide them with all the necessary documentation.


Misconception 8: Florida Will Honor A Power of Attorney That Is Valid In Another State


Technically speaking, this may be true. But in reality, different states have different standards for the DPOA. And as noted above, financial institutions are very selective about honoring the document, and some will automatically reject documents from out of state. Thus, if you have moved to Florida and still have a DPOA from a different state, you are well advised to have an estate planning attorney draft a new document for you that conforms to all Florida requirements. This is particularly important with regard to real property.


Misconception 9: Medicare and Social Security Will Honor Your Power of Attorney


False, and it comes as a surprise for most people. Your agent under your DPOA has no authority to deal with your Medicare and Social Security matters. Instead, the agency will appoint a representative payee if someone is not capable of managing their own benefits. The representative could be a family member, friend, or an organization.


Misconception 10: Your DPOA Guarantees That You Will Never Fall Into Guardianship


Because the DPOA names someone to handle the principal’s affairs, it can help ward off guardianship if the principal becomes unable to handle his/her own affairs. On the other hand, the DPOA does not actually prevent the principal from continuing to act on his/her own behalf.  Put another way: if a principal is determined to continue managing his own affairs, even if he/she is clearly incompetent, the DPOA does not give the agent the power to stop the principal from doing so.  It doesn’t happen often, but if the principal is making destructive economic decisions and refuses to relinquish control, the only option may be to petition the court to declare the principal incompetent. The court may then establish a guardianship for the principal. Alternatively, the court may declare the principal incompetent and take away his/her right to make financial decisions, while allowing the agent to continue to act without court supervision.


As you can see, creating a Durable Power of Attorney requires a good deal of thought and a good understanding of both its powers and limitations. The attorneys of The Karp Law Firm can advise you. Call (561) 625-1100 for an appointment.